UPDATE 1-Denmark central bank expects 'moderate boom' on private demand

Reuters
·1 min read

(Adds details, central bank governor comment)

COPENHAGEN, June 23 (Reuters) - Denmark's central bank expects the economy to enter a "moderate boom" this year and the next, buoyed by strong private demand and high savings accumulated during the pandemic.

"With the economy heading for a mild boom, the government should be prepared to tighten fiscal policy more than planned," central bank governor Lars Rohde said.

The central bank forecast 3.3% growth this year and 3.7% in 2022, up from a previous forecast of 1.4% and 4.5%, respectively.

It forecast economic growth of 2.2% in 2023.

"Overall activity has all more or less recovered to pre-pandemic levels, and the Danish economy is supported by a strong expansion in private demand," the central bank said.

The central bank also repeated an earlier call for measures to contain rapidly increasing housing prices.

"Amortisation requirements for the most indebted homeowners and a reduction of the interest deduction will reduce vulnerability to large housing market fluctuations and prevent unsustainable risk building," Rohde said. (Reporting by Nikolaj Skydsgaard and Stine Jacobsen; editing by Jason Neely and Kim Coghill)